Charts: Dow Theory Offers Rebound Hope

CNBC.com

Wednesday, 4 Mar 2009 | 4:31 AM ETCNBC.com

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The Dow Jones Industrial Average could pull up from its recent dramatic freefall if the Dow Jones Transportation Average manages to stay above critical support levels, Roelof van den Akker, chartist at ING Wholesale Banking, told CNBC.

Dow Strength Relies on Transport: Charts

The Dow Jones Industrial Average could break higher during the next couple of months if the Dow Jones Transportation Average manages to hold above critical support levels, Roelof van den Akker from ING Wholesale Banking told CNBC Wednesday.

“For the very short term yes, it’s weak, it’s gloomy, but looking at the Dow Theory we could have a bullish divergence which could lead to a trend change for the next couple of months,” Akker said.

The much-watched theory for predicting market moves suggests that if the transport index can manage to not follow the industrial average to the downside, it can act as a lifeline.